To Show How to Calculate the Hedge Ratio, We Use

question 57

Multiple Choice

To show how to calculate the hedge ratio, we use notation that includes the following: ________.

• A) S = current asset price and C = current price of a call option.
• B) Cd = intrinsic value of the call option if the asset price goes up and E = strike price of the call option.
• C) d = current price of a call option and r = a risk-free one-period interest rate .
• D) E = strike price of the call option and u = current asset price.

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